Mortgage and Lending with Model Citizens "NO POINT LOANS"

REUTERS  Fed funds down to 0.5 percent in late trade [JBHKPZN]


    NEW YORK, Sept 15 (Reuters) - Federal funds traded in the

U.S. interbank lending market slipped to about 0.5 percent late

 on Monday in the aftermath of two Federal Reserve temporary

additions to the banking system that totaled a combined $70


    Earlier on Monday, federal funds had surged to 6 percent in

the market, well above the Federal Reserve's target rate of 2


    When inter-bank lending rates shoot up in the market, that

often reflects distrust among financial institutions of lending

to some other counterparties. Global market participants' risk

aversion surged on Monday as the U.S. banking crisis escalated,

analysts said.

    U.S. short-term interest rate futures showed about a 76

percent chance of an implied 25-basis-points Federal Reserve

rate cut, to 1.75 percent, in the target rate at its

policy-setting meeting Tuesday.

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